Shell, Vopak, Greenergy to buy Coryton UK refinery for use as terminal

6/26/2012

By KONSTANTIN ROZHNOV

Royal Dutch Shell, Royal Vopak and Greenergy have agreed to buy the majority of the assets of Petroplus Coryton refinery in England to turn it into an import and distribution terminal, the administrator of Petroplus's UK subsidiaries, the companies and the UK government said Tuesday.

The terminal will be managed by Vopak.

The sale will be completed within several months, once the current refinery closure process has been concluded, PricewaterhouseCoopers, the administrator, said in a statement.

The site is of exceptional value as an import terminal because of its location and amenities, so it is not surprising that it has had a higher sale value as an import terminal [than a refinery]," UK Energy Minister Charles Hendry said in a statement.

There is no change to the redundancy program announced earlier in June, with 180 jobs to be cut by the end of June and further redundancies anticipated from late July onward as the closure progresses, PWC said.

The facility employs around 500 permanent workers.

"It is expected that a small number of employees and contractors will be retained to provide site security beyond the end of the summer," the administrator added.

"This move will provide a long term, secure supply for our customers in the UK and will support the recent expansion of our retail network, delivering competitive supply chain costs," Graham van't Hoff, chairman of Shell UK, said in a statement.

Before Petroplus lost access to all its credit lines and then filed for insolvency in January, Coryton was supplying around 10% of the UKs fuel market.

"Vopak, Greenergy and Shell have committed to investing a substantial amount in the site to develop it as a state-of-the-art import terminal," Mr. Hendry said.

The three companies said in a statement they will be equal shareholders of the new joint venture, which will acquire and develop the Coryton assets and the site.

When the future design and operational capabilities are agreed, Vopak will develop the new facility and will operate the terminal after the works have been completed, while Greenergy and Shell will sign long-term contracts with the joint venture, the companies said.

"The UK will have a new import terminal and its first deep-water product jetty," said Mr. Hendry. "This will allow low-cost high quality diesel to be imported, thereby enhancing security of supply for London and the southeast, and more affordable prices at the pumps."